EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705138
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Coca Cola Amatil Pty Ltd applied for a TCO in respect of certain tunnel pasteurisers on 4 April 2007.
Instrument
TCO No 0705138 was made on 10 January 2008. It declares that those certain tunnel pasteurisers are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. One submission objecting to the TCO application was received from J C Design Pty Ltd.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0705138 is taken to have come into force on 4 April 2007.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted to provide a framework for the regulation of customs duties in Australia. The Tariff Concession Instrument No. 0705138 was introduced to address the need for tariff concessions on specific goods that are not produced domestically and for which a lower rate of customs duty would be beneficial. This instrument was developed in response to an application by Coca Cola Amatil Pty Ltd for tariff concessions on certain tunnel pasteurisers, which was made on 4 April 2007. The instrument was enacted by the Chief Executive Officer of Customs, who determined that the application met the core criteria set out in the Act, including the absence of substitutable goods produced in Australia at the time of the application. The tariff concession effectively provides a duty-free rate on these goods, benefiting importers who can now apply for duty refunds on imports made since the effective date of the concession. The instrument was subject to public consultation, with one submission objecting to the concession, and it came into force on the date the application was lodged.
Scope and Application
The Customs Act 1901, as amended, facilitates tariff concession orders (TCOs) that apply lower rates of customs duty to specified goods. This process is managed by the Chief Executive Officer of Customs (CEO), who evaluates applications to determine if they meet the core criteria, primarily by confirming that no substitutable goods are produced in Australia in the ordinary course of business. Once an application is approved, the CEO issues a TCO, which effectively reduces the customs duty rate for the specified goods. In this context, TCO No. 0705138 was issued on 10 January 2008 for certain tunnel pasteurisers, lowering their duty rate from 5% to free, effective from the date of application, 4 April 2007. The application process mandates that the CEO publish a notice in the Gazette inviting objections to the TCO, with one submission received from J C Design Pty Ltd opposing the concession for the pasteurisers. Importantly, the TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth, and it allows importers to apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0705138, made under section 269F of the Customs Act 1901, establishes a tariff concession order (TCO) for certain tunnel pasteurisers. Specifically, section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that a TCO application meets the core criteria, they must issue a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. In this case, the CEO determined that item 50 applies, resulting in a duty-free rate for these goods.
The obligations imposed by the Act on parties include the requirement for the CEO to assess applications for TCOs against the core criteria outlined in sections 269C and 269SJ. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons the TCO should not be granted, as per subsection 269K(1). The CEO must then consider these submissions before making a final decision. In the case of TCO No. 0705138, the CEO was satisfied that the application met the core criteria after reviewing the submissions, including one from J C Design Pty Ltd.
Breaches of the provisions in the Customs Act 1901 can result in various penalties and consequences. While the explanatory statement does not detail specific offences or penalties related to TCO applications, general penalties for non-compliance with customs regulations can include fines and, in severe cases, imprisonment. The maximum penalties depend on the specific contravention and are set out in the Customs Act 1901 and related regulations. The Act ensures that the rights of non-Commonwealth entities are protected, meaning that the TCO does not disadvantage anyone or impose liabilities for actions taken before the TCO's effective date.